2521 Point Del Mar

Newport Beach, CA 92625

$3,745,000D

3 bd · 2.5 ba · 2,392 sqft · Built 1987 · SingleFamily · Active · 59 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,664/mo
• Mortgage (P&I): −$19,639
• Tax + insurance: −$3,083
• HOA: −$255
• Vac / Maint / Mgmt: −$2,659
• Net cashflow: $-12,973/mo
• Annual: $-155,677/yr
• Cap rate: 2.14%
• Cash-on-cash: -14.85%
• DSCR: 0.34
• 1% rule: 0.34%
• Cash to close: $1,048,600

Investor read

• This is a 3-bed/2.5-bath single-family listed at $3.75M.
• At list price, monthly cash flow is $-13k ($-156k/yr) — negative.
• To cash-flow at today's rent, offer at most $1.45M (61.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.27M (66.2% below list).
• It's been on market 59 days — a 3% lower offer ($3.63M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.27M (66.2% below list) — sets the bar for 1% rule.
• In year one you build about $400k of equity ($26k loan paydown + $374k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#101 in CA, #3,645 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, employment A+, commute A; Watch: health & safety C-, cost of living F.
• Newport-Mesa Unified (urban): math 46% / reading 58% proficiency, ranked #106 of 517 in CA (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Harbor View Elementary (math 67%, 295 students, 12% FRL); Corona Del Mar High (math 55% / reading 63%, grade C+, #221 of 1,170 statewide, top 19%, 2,059 students, 20% FRL) — zoned schools average 16% FRL vs 40% district-wide (24 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising fast (+12.4%/yr); 91 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 8 sale attempts since 13y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $1.39M; list at $3.75M implies a 170% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$644k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.1% vs local median 0.6% in Newport Beach — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $12,664/mo this rent would consume 87% of the median local household income ($175k/yr) (locally 767% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 59 days. Have you received any prior offers? Is the seller open to a 66% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.